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Friday, July 20, 2012

Management and Organizations | Efficiency and Effectiveness

Discuss the difference between
efficiency and effectiveness and include a specific example to support each concept.

Answer:

a. Efficiency
refers to getting the most output from the least amount of inputs. Because
managers deal with scarce inputsincluding resources such as people, money, and
equipmentthey are concerned with the efficient use of resources. For instance,
at the HON Company plant in Cedartown, Georgia, where employees make and
assemble steel and wooden office furniture, efficient manufacturing techniques
were implemented by doing things such as cutting inventory levels, decreasing
the amount of time to manufacture products, and lowering product reject rates.
From this perspective, efficiency is often referred to as "doing things
right"that is, not wasting resources.

b.Effectiveness is often described as "doing
the right things"–that is, those work activities that will help the
organization reach its goals. For instance, at the HON factory, goals included
meeting customers' increasingly stringent needs, executing world-class
manufacturing strategies, and making employee jobs easier and safer. Through
various work methods and programs, these goals were pursued and achieved.
Whereas efficiency is concerned with the means of getting things done,
effectiveness is concerned with the ends, or attainment of organizational
goals.